New pipeline cuts Iran’s reliance on Turkmen gas

The Damghan-Neka gas pipeline was inaugurated in the Iranian city of Sari on Aug. 1, 2017. (Photo by IRIB News Agency)

Iran has inaugurated a gas pipeline which officials say will dispense with supplies from neighboring Turkmenistan to northern Iranian provinces, especially in the winter when demand spirals out of control.

The Damghan-Neka pipeline, the last segment of a trunkline which feeds gas from Iran’s giant South Pars field in the Persian Gulf to the Mazandaran province in the Caspian Sea, was inaugurated by Minister of Petroleum Bijan Zangeneh on Tuesday.

The 170 km pipeline will have a capacity to transfer 40 million cubic meters of gas per day, media reports said.

“With the construction of the Damghan-Neka gas pipeline, there will be no reduction or drop in gas pressure in the northern cities in the winter. With the opening of the pipeline, Iran no longer needs to import gas from Turkmenistan,” the spokesman for parliament’s Energy Commission Asadollah Qareh-Khani said.

“With the opening of this pipeline, the concerns and anxieties of the citizens about gas disruptions in northern Iran, especially in the winter, will also be resolved,” he added.

Turkmenistan stopped the gas flow to Iran in January 2017, demanding that the Islamic Republic settle a debt which allegedly remained outstanding from previous imports.

Ashgabat claims Iran owes it $1.8 billion from sales between 2007 and 2008 when freezing winters led to severe shortages across 20 Iranian provinces, forcing the country to raise gas imports from its northeastern neighbor.

At the time, Turkmenistan pounced on the occasion to demand a nine-fold hike which yanked the price up to $360 from $40 for every 1,000 cubic meters of gas.

According to Turkmen officials, the balance has built up to a debt of $1.8 billion which Iran is rejecting and has threatened to take the case to international arbitration.

Iran imported about 35-40 million cubic meters a day of gas from Turkmenistan under a deal which has stood for the past 20 years.

Zangeneh threatened at the time that if the Turkmens insisted on halting the gas flow, Iran would stop its energy dealings with the country altogether, the IRNA news agency reported.

“According to experts, Ashgabat would be the biggest loser of this dispute,” the news agency added.

Turkmenistan has no access to open seas and its shipment of gas to international markets has to go through the neighbors, including Iran which was the Central Asian country’s biggest gas customer.